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6- Lewis runs an outdoor adventure company and wants to know what effect a tax change will have on his company's WACC. Currently, Lewis has
6-
Lewis runs an outdoor adventure company and wants to know what effect a tax change will have on his company's WACC. Currently, Lewis has the following financing pattern:
Equity:
33%
and cost of
18.36%
Preferred stock:
11%
and cost of
13.94%
Debt:
56%
and cost of
11.6%
before taxes
What is the adjusted WACC for Lewis if the tax rate is
a.
40%?
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